NEW DELHI: India and New Zealand on Monday announced the conclusion of talks for a free trade agreement that will give duty-free access to a range of domestic goods, particularly from labour-intensive sectors, and includes an FDI commitment of USD 20 billion over 15 years.
The agreement is expected to help double bilateral trade in goods and services to USD 5 billion in five years.
On the other hand, New Zealand will get duty-free access to goods such as sheep meat, wool, coal and over 95 per cent of forestry and wood articles. Under the pact, Wellington will get duty concessions on a number of other items such as kiwi fruit, wine, some seafood, cherries, avocados, persimmons, bulk infant formula, Manuka honey and milk albumins.
To protect the interests of domestic farmers and MSMEs, India will not give any duty concessions in the politically sensitive dairy sector, like milk, cream, whey, yoghurt, and cheese.
The other products which will not be covered under the pact include vegetable products (onions, chana, peas, corn, almonds), sugar, artificial honey, animal, vegetable or microbial fats and oils, arms and ammunition, gems and jewellery, copper and its products, and aluminium and articles.
As regards the services sector, New Zealand will give a temporary employment entry visa pathway for Indian professionals in skilled occupations with a quota of 5,000 visas annually and a stay of up to three years.
This pathway covers Indian professions such as AYUSH practitioners, yoga instructors, Indian chefs, and music teachers, as well as high-demand sectors including IT, engineering, healthcare, education, and construction, strengthening workforce mobility and services trade.
The agreement is likely to be signed and implemented in about 7-8 months. The pact would help Indian exporters, reeling under the impact of 50 per cent tariffs imposed by the Trump administration on Indian goods, to diversify shipments in the Oceania region. India has already implemented a trade pact with Australia.
Prime Minister Narendra Modi and his New Zealand counterpart Christopher Luxon on Monday announced the firming up of the pact.
The two prime ministers held a phone conversation, following which the announcement on the FTA was made.
With negotiations having been initiated during Luxon's visit to India in March 2025, the two leaders agreed that the conclusion of the FTA in a record time of nine months reflects the shared ambition and political will to further deepen ties between the countries.
The FTA would significantly deepen bilateral economic engagement, enhance market access, promote investment flows, strengthen strategic cooperation between the two countries, and also open up new opportunities for innovators, entrepreneurs, farmers, MSMEs, students and youth of both countries across various sectors.
"Both leaders expressed confidence in doubling bilateral trade over the next five years as well as an investment of USD 20 billion in India from New Zealand over the next 15 years," an official statement said.
Goyal said that the investment will give a boost to domestic manufacturing and generate jobs.
Further under the pact, New Zealand will set up a dedicated Agri-Technology Action Plan on kiwifruit, apples and honey with a view to helping Indian farmers enhance productivity and quality.
The cooperation includes the establishment of Centres of Excellence, improved planting material, capacity building for growers and technical support for orchard management, post-harvest practices, supply chain performance, and food safety.
Commitment has been extended by New Zealand on Geographical Indications (GIs), including amendment of its law to facilitate the registration of India's wines and spirits.
"Cooperation has been agreed in AYUSH, culture, fisheries, audio visual tourism, forestry, horticulture and traditional knowledge systems," the commerce ministry said.
Apart from tariff liberalisation, the pact includes provisions to address non-tariff barriers through enhanced regulatory cooperation, and streamlined customs, sanitary and phyto-sanitary measures and technical barriers to trade disciplines.
Pharma and Medical Devices sector will get a boost through faster regulatory access in New Zealand by enabling acceptance of GMP (Good Manufacturing Practice) and GCP (Good Clinical Practice) inspection reports from comparable regulators, including approvals by the US FDA, EU's EMA, UK's MHRA.
"This will reduce duplicative inspections, lower compliance costs, and expedite product approvals, thereby facilitating the growth of India's pharmaceutical and medical devices exports to New Zealand," the ministry said.
Commerce and Industry Minister Piyush Goyal said that this is the seventh agreement finalised by the NDA government. It includes the UAE, Australia, the UK, EFTA bloc, Oman and Mauritius.
He said that the India-New Zealand pact is the first pact in which all the main officials from the Indian side involved in the negotiations were women. India's chief negotiator is Joint Secretary in the Ministry, Petal Dhillon.
He also said that India has so far finalised FTAs with three members of the Five Eyes (FVEY) alliance - Australia, the UK and New Zealand.
The five countries of the intelligence sharing network are Australia, Canada, New Zealand, the UK, and the US.
India is in the advanced stage of negotiations for a bilateral trade agreement with the US and in the process of resuming talks for a trade agreement with Canada.
"The current bilateral trade with New Zealand is small but the upside potential is huge," Goyal told reporters here.
Bilateral merchandise trade stood at USD 1.3 billion in 2024-25, while total trade in goods and services reached about USD 2.4 billion in 2024, with services trade alone reaching USD 1.24 billion, led by travel, IT, and business services.
Commerce Secretary Rajesh Agrawal said that although only five formal rounds were held for the pact, both sides remained in continuous touch to close the negotiations.